New York Markets After Hours

Bank stocks fall, but Warren Buffett does OK

ChristinaRexrode

Financial stocks fell Monday morning as investors waited to see how the government’s budget battle plays out, while predictions on the upcoming earnings season were just “meh.”

The third quarter, which ends today, is shaping up as pretty disappointing for the big banks, and analysts are expecting less and less good news. Fixed-income trading has slowed since the Federal Reserve decided to stay the course on quantitative easing — creating fewer opportunities to trade, in the eyes of many investors. Rising interest rates have quashed the mortgage demand that fueled some of the past quarters. And legal bills are mounting in large and uncertain proportions: Exhibit A is J.P. Morgan Chase & Co.
JPM, -0.62%
which is trying to settle federal investigations into its mortgage securities sales and other practices.

More will be revealed at the end of next week. Bank earnings season begins in earnest Oct. 11, when J.P. Morgan Chase and Wells Fargo kick things off.

J.P. Morgan’s stock fell 1.4% in morning trading. Bank of America, Citigroup, Goldman, Morgan Stanley and Wells Fargo & Co.
WFC, -0.68%
were down by similar amounts, and the Financial Select Sector fund was down 1%.

To be fair, it wasn’t just the banking sector that was losing ground. All the major U.S. stock indexes were down, largely because the government could shut down Tuesday if lawmakers don’t reach a budget compromise.

Elsewhere, Mark Cuban, the outspoken owner of the Dallas Mavericks, commenced his court battle with the Securities and Exchange Commission, which has accused him of insider trading.

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